according to harrod domar model the level of savings remain constant to the proportion of income. Harrod-Domar model assumes a simple production function y=f(k), where k is capital
according to harrod domar model the level of savings remain constant to the proportion of income. Harrod-Domar model assumes a simple production function y=f(k), where k is capital
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difference between horred-domer and solow model
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It assumes that savings and investment are all that is needed
for growth. No diminishing returns to capital is an implicit
assumption.
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By the Harrod-Domar model, net investment should be greater than
depreciation rate or there should be an increase in the
productivity of the factors of production.